Who should the manager hire

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The manager at Striker Corporation can hire only one student for the summer. She can hire Ken, a marketing student, who will do research on a marketing plan, or Lisa, a tax student, who will research tax strategies to reduce corporation taxes. If she hires Ken, his wages and benefits will total $5,600 (all tax deductible expenses). Ken's marketing plan is expected to generate $6,000 in new revenues with a probability of success estimated at 80 percent. If she hires Lisa, her wages and benefits will be $6,000 (also fully tax-deductible). Lisa's tax plan is expected to save Striker $5,600 in federal income taxes. The probability of success for this plan is estimated to be 75 percent. Striker's marginal tax rate is 39 percent. Who should the manager hire?

Reference no: EM13517046

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